Finance, Planning, and Budgeting

Introduction and Overview

In the exigencies of educational endeavor, the types and amounts of available resources have always been an integral part of the plans, processes, and productivity of school organizations. How and under what conditions schooling is funded remains a highly complicated situation in every venue where educational programs and activities are provided. The purpose of this chapter is to explore the nature and status of financing public education in the United States and to explicate ways and means of planning and managing the financing process. Ironically, this chapter's title contains some redundancy in that budgeting is actually a form of planning, but the dramatic changes in funding elementary and secondary schools in the past decades have produced developmental responses from school organizations with unusual and different personal, social, economic, and political results.

The political shift in public expectations for schools in the United States has focused in recent times on a national drive to provide education that ensures that all schoolchildren learn and achieve to high standards. This is nothing new: Each generation of Americans has sought a better life for its children. For example, in 1918, the Commission on Reorganization of Secondary Education issued a report citing essential principles of education. Twenty years later, another national organization called for rededication to a set of educational precepts for American youth (Educational Policies Commission, 1938). This has continued with regularity over time, with one of the most visible reports issued under the Reagan administration in 1983, stating that America's schools have placed them at risk in global competition (National Commission on Excellence in Education, 1983). In the 5 years following 1983, no fewer than 32 other reports addressed the needs of schooling and future citizens (“Reports on U.S. Reform,” 1988). The call for reform continues unabated.

A new set of national priorities, reflected in the No Child Left Behind Act proposed by President Bush in 2001 and signed into law on January 8, 2002, has now created problems for school boards and educators to meet the [Page 551]political demands placed on them within an economic climate of limited or eroding financial resources. Meeting the financial demands of improvement, reform, and economic temperance is nothing new in the American culture, which has always viewed education as critical for its continued world preeminence and economic survival.

A national desire to ensure that all children learn and achieve to high standards has provoked policymakers and educators to search for better ways to provide schoolchildren with the knowledge and skills they need to function effectively as citizens and workers in a future society that promises to be increasingly complex and globally interconnected (Ladd & Hansen, 2002).

Of course, any organizational activity, public or otherwise, requires resources to function, and a key part of the changes in educational enterprise involves how decisions for financial support are made and how financial support is applied from the more than $300 billion that the United States spends annually on public elementary and secondary education.

The largest piece of budgeted funds of state and local governments in the United States is for the support of education. About $1 in $20 of the U.S. gross domestic product is consumed by education, with about 75% of that going to traditional K-12 education alone. More than 50 million children attend school, and the number of people—educational professionals and support staff—employed in education numbers about 1 for every 10 students. By any measure, education in the United States is an enormous enterprise.

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